The media are all saying that Arizona now has the toughest law in the nation on illegal immigrants.

The article speculates that the law could add to the oversupply of homes on the market if many illegals decide to leave Arizona.

On the other hand, I wonder if the law will be enforced and whether it will have an affect on new home construction. If it is enforced, I will speculate that labor shortages and higher wages could end up increasing construction costs and lowering the number of new homes built. Some marginal builders might also be pushed over the edge further lowering production.

Actually, see could see both effects. In areas where illegals tend to live, prices might decline as more homes hit the market. In areas with a lot of new home construction, prices might strengthen as new construction falls.